Indian Treaty Series

AGREEMENT ON TRADE AND ECONOMIC COOPERATION
Between The Government of the Islamic Republic of Iran
and THE GOVERNMENT OF THE REPUBLIC OF INDIA

The Government of the Islamic Republic of Iran and the Government of the Republic of India, hereinafter referred to as the Contracting Parties:

Mindful of the close, traditional and friendly relations between the two countries.

Desirous of further expanding, strengthening and diversifying the trade relations and economic cooperation between the two countries on the basis of equity, mutual respect and reciprocal benefits have agreed as follows:

ARTICLE 1
SCOPE OF THE AGREEMENT

The Contracting Parties shall promote mutual trade and economic cooperation between their countries on a stable and long term basis. The commercial exchanges between the Contracting Parties and contracts concluded between natural persons or legal entities of the Contracting Parties within the framework of this Agreement are subject to the laws, rules and regulations prevailing in the two countries and in accordance with international practices and at international prices. Neither Contracting Party shall be responsible for liabilities of the said natural and juridical persons arising from such commercial transactions.

ARTICLE 2
TARIFF/NON-TARIFF MEASURES

The Contracting Parties shall grant to each other treatment no less favourable than accorded to the like goods and commodities originating in or exported to any third country and vessels involved in carrying out these activities particularly relating to the following matters:

a. Customs duties and charges of any kind including the method of levying such duties and charges imposed on or in connection with importation or exportation.
b. Rules and formalities connected with customs clearance.
c. The issuance of import and export licenses.
d. Non tariff measures as well as legitimate technical barriers to trade, such as quarantines, health and hygienic conditions and such similar matters.
e. Merchant cargo-bearing vessels/cargo-bearing aeroplanes in respect of their entry into, stay in and departure from the harbour/airport of the other party, in accordance with the laws, rules and regulations in force in the said other party.

ARTICLE 3
TRADE PREFERENCES

The provisions of Article 2 shall not apply to:

a. Special preferences or other advantages accorded by either party resulting from its association in a regional or sub-regional arrangement, customs union or a free trade area or measures leading to a customs union or a free trade area.
b. Tariff preferences or other advantages which either Contracting Party grants or may grant to facilitate frontier/border traffic.
c. Special tariff preferences or other advantages which either party may grant to developing countries under any trade expansion or economic cooperation scheme of which the other party is not a member.

ARTICLE 4
RE-EXPORTATION TO A THIRD PARTY

The commodities/goods exchanged between the contracting parties might be re-exported to third countries, subject to the laws, rules and regulations prevailing in the two contracting parties.

ARTICLE 5
THE ISSUANCE OF THE CERTIFICATE OF ORIGIN

Each Contracting party, shall in accordance with the rules of origin, provided for in the agreement on the Global System of Trade Preferences among Developing Countries (GSTP), take proper measures to issue certificate of origin for the commodities/goods exported to the other Contracting Party.

ARTICLE 6
STANDARDS

The exchange of commodities/goods and services between the parties shall be in accordance with the standards agreed upon by the respective organization of the Contracting Parties.

ARTICLE 7
SYSTEM OF CURRENCY RECEIPT AND PAYMENT

1. All payments arising from trade between the two countries shall be made in freely convertible currencies, subject to foreign exchange regulations and other pertinent laws, rules and regulations effective in the respective countries.

2. All trade transactions shall be carried out in conformity with the provisions of the ACU mechanism.

ARTICLE 8
EXPANSION OF COMMERCIAL ACTIVITIES

The Contracting parties, to expand and develop further the commercial activities between them, shall encourage and promote mutual economic and technological cooperation subject to the laws, rules and regulations of their respective countries including, inter-alia, the following:

a) Cooperation in the fields of science and technology, tourism communication, training of personnel, and other similar areas of mutual interest;
b) Mutual investments, including establishment of joint ventures in each other’s territories, as well as in third countries;
c) Mutual exchange of delegations, businessmen, close cooperation between the Chambers of Commerce of the two countries, direct business level contacts, use of trade mechanisms such as counter-trade and buy-back arrangements etc.
d) Each Contracting Party shall encourage its commercial companies and institutions to participate in international/specific fairs held in the territory of the other Party.

ARTICLE 9
JOINT COMMISSION

The Indo-Iranian Joint Commission established in accordance with Article-I of the Agreement between the Contracting Parties signed at Tehran on 19th July 1983, shall continue to review issues, inter-alia, pertaining to the areas of cooperation covered by this Agreement and promote its implementation. The Sub-Commission dealing with trade and appointed in accordance with Article-III of the said Agreement of 19.7.1983 may hold its meetings as part of the Indo-Iranian Joint Commission or separately, if the urgency of certain mutual trade issues so demand, and the Joint Commission is not likely to meet at short notice.

The Sub-Commission will, however, meet as often as mutually considered necessary, but shall to the extent possible, hold its meetings as part of the Joint Commission, either at Tehran or New Delhi. The Sub-Commission may invite, to such meetings as may be agreed upon, official and non-official experts and advisors of the two countries.

ARTICLE 10
SETTLEMENT OF TRADE DISPUTES

Disputes relating to trade between nations, state corporations and private organisation/companies of both the contracting parties will be attempted to be resolved amicably through mutual discussions. However, if these cannot be resolved in a timely manner, either of the two parties in dispute shall be free to refer the matter to appropriate courts/forum in terms of the contract.

ARTICLE 11
CONSULAR FACILITIES

The Contracting Parties in order to expand mutual trade relations agreed to provide consular facilities such as the grant of business visa and certification of commercial documents.

ARTICLE 12
CUSTOMS DUTIES AND CHARGES

Customs duties and other dues shall be collected in accordance with the Agreement on the Global System of Trade Preference among Developing countries (GSTP).

ARTICLE 13
ACHIEVEMENT OF BALANCE IN COMMERCIAL EXCHANGES/
TRANSACTIONS

Each Contracting Party in order to attain a balanced trend in mutual trade exchanges shall satisfy as far as possible , its trade needs with the observance of the preferences under its laws and regulations from the other Contracting Party.

ARTICLE 14
ESTABLISHMENT OF TRADE OFFICE OR CENTER

In order to facilitate and develop the exchange of commodities/ goods, services and trade information between the Parties, each Contracting Party shall, on reciprocal basis, permit the other Party to establish a trade office or center in its territory, subject to its rules and regulations. The number of employees and the equipment and branches of the said office or centre shall be determined through the future agreement of the Contracting Parties.

ARTICLE 15
PROTECTION OF PUBLIC HEALTH AND NATIONAL INTERESTS

The provisions of the present Agreement shall not affect the rights of either party towards the imposition of any ban or restriction with regard to the protection of national interests, public morale and health and/or prevention of diseases, protection of animal life, plant life etc.

ARTICLE 16
DURATION OF THE VALIDITY OF THE AGREEMENT

a) The present Agreement shall come into force on the date of the last notification by one of the Contracting parties to the other indicating that it has complied with its constitutional requirements for entry into the force of the present Agreement. This Agreement shall remain in force for a period of five years. After the expiry of this period, it shall be automatically extended for successive one-year periods, unless either Contracting party notifies the other in writing six months prior to termination of relevant period that it does not intend to extend the Agreement.

b) The provisions of this Agreement shall continue during the period of its validity and its termination shall not affect the commercial contracts, projects and other programmes concluded in conformity with the Agreement and already executed or in progress.

c) This Agreement may be modified or amended by mutual consent.

d) This Agreement supersedes and replaces Indo-Iranian Trade Agreement of 31st August, 1974.

e) This Agreement is written in three texts, in Hindi, Persian and English languages, all texts being equally authentic. In case of doubt, the interpretation of the English text shall prevail.

Done at Tehran on this in Farsi, 10th day of April 2001, corresponding to 21st of Farvardin 1380 in two original copies.

For the Government of The Islamic Republic of Iran
For the Government of The Republic of India

India Bilateral

Ministry Of External Affairs, India